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ROI of Social Media Based on Paul Gilllin's work

ROI of Social Media Based on Paul Gilllin's work

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  • WOM precedes mass communication.
  • WOM precedes mass communication.

Heligonix roi Heligonix roi Presentation Transcript

  • We teach companies to build loyal and profitable customer communities.
  • What is YOUR investment worth? Exploring ROI
  • Is it Return on Investment Or Risk of Inaction ?
  • COST OF INVESTMENT (GAIN FROM INVESTMENT - COST OF INVESTMENT ) ROI =
  • A. Revenue B. Costs Avoided Anything that leads to A or B, But only if you can directly equate its value to an action Types of Financial Impact
  • These are NOT ROI Website Visitors Click-throughs Store visits Press coverage “ Buzz” Employment applications Retweets FaceBook friends Blog comments Video views Twitter followers Impressions Friends But if you can quantify their financial impact, you have ROI!
  • Historical Metrics Excellent CRM Tools and Practices Clearly Understood and Applied Web Analytics What You Need
  • Lifetime Value of a Customer = (Longevity * Revenue) * Margin Basic Business Metrics New Customers Visits/Leads Value of a Lead/Visitor = Visitor * Conversion Rate * Lifetime Value Conversion Rate =
  • If a typical customer spends $10,000/year with you And the customer is with you for five years Your profit margin is 10% Lifetime value of a customer is ($10,000 * 5) * .1 = $5,000 Let’s Make It Real
  • Must be used by everyone who touches the customer Must document online, offline and landline communications Must span the engagement lifecycle Must enable segmentation and grouping CRM Essentials
  • Must track individual visitors You must use them Must document paths to desired destinations Must identify referring sources Web Analytics
  • Monthly Visitors Conversation Rate Lifetime Value Calculation Value of a Visitor 10,000 .5% $5,000 $25 10,000 x .005 x 5,000 10,000 Applying ROI: Value of a Visitor
  • Value of a Blog Monthly Search Traffic Estimated Traffic w/Blog Value of a Visitor Monthly Value of a Blog Monthly Blog Expense 3,000 4,000 $25 $25,000 $6,000 316% ROI ( ) $25,000-$6,000 $6,000
  • Value of a Tweet
    • You send 50 tweets a month…
    • Generating 1,000 visitors to your website…
    • 2% of whom become leads…
    • 5% of whom become customers.
    • Therefore, the value of a tweet is:
    (1,000 * .02 * .05 * 5000)/50 = $100
  • You want to launch a customer support forum to reduce your costs of telephone support Estimated admin costs: ½ FTE yr 1, ¼ FTE yr 2 1/10 FTE yr 3 Estimated savings: 1 FTE yr 1, 1.5 FTE yr 2, 2 FTE yr 3 Cumulative ROI: the eye chart Year Item Annual Cumulative 1 Forum Administrative costs $ 35,000 $ 35,000 Savings $ 70,000 $ 70,000 ROI 100% 100% 2 Forum Administrative costs $ 17,500 $ 52,500 Savings $ 105,000 $ 175,000 ROI 500% 233% 3 Forum Administrative costs $ 7,000 $ 59,500 Savings $ 140,000 $ 315,000 ROI 1900% 429%
  • If You Can Measure It, You Can Calculate Its ROI Lift Studies Store visits Headline Counts Employment applications Speaking Invitations Net Promoter Score Coupons redeemed Measuring the Immeasurable
  • Thank you Paul Gillin
  • Thank You